The Bruce Report

The words of Canada’s most quotable, if not necessarily admired, Prime Minister now haunt those who may yet hold faint hope that jumping into the sack with the world’s largest economy is still the only way to secure our national prosperity.

By announcing, last week, that it will simply ignore the unanimous ruling by the North American Free Trade Agreement’s court of last resort (the Extraordinary Challenge Committee), which instructs it to drop its unfair and illegal tariffs on imports of Canadian softwood lumber, the U.S. government has taken a page out of Tony Soprano’s playbook: “So, you Canucks want your five billion bucks back. Well, Fuggetaboutit! Waddaya gonna do, anyhow? Cry to your mother?”

Actually, there is a whole lot of crying going on north of the 49^th parallel. But most of it is of the blood-curdling, not weeping-wuss, variety. Here’s what one charter free trader, Canadian Senator Pat Carney, offers: “I always said they (the U.S.) were jackboot negotiators. . .We will have to see now whether it (NAFTA) unravels totally after this.”    

Adds Derek Burney, one of the architects of the original deal with the States: “This is the tactic of the schoolyard bully, which was exactly what we were trying to prevent when we negotiated the free-trade agreement. . .It’s beyond the pale.”

And, says veteran trade mandarin Gordon Ritchie: “There is a strong case to be made that when you’re dealing with a bully, and the bully punches you, you should punch him back.”

Strangely, that’s what I thought we had been doing lo’ these past few years to our fat-bellied American cousins every time they squealed when our lumber producers simply showed themselves to be better, more productive and competitive than their own homegrown varieties. Canada has won every challenge at every bi-lateral commission since the dispute blossomed more than three years ago.

In fact, says Globe and Mail columnist John Ibbitson: “In 1987, the free-trade negotiations almost collapsed because the Americans refused to accept a binding dispute resolution mechanism, while Canada insisted on one. At almost literally the last moment, the Americans accepted the Canadian demand, on the condition that an Extraordinary Challenge Committee, as they called it, be able to review the decisions of all lower panels. . .It was to that committee that the Americans appealed last year, when all other rulings on softwood imports went against them. It was that same committee that ruled last week in Canada’s favour.”

And this puts the nation between that proverbial rock and hard place. For all of its purported dislocations and injuries over the years, NAFTA has been generally good for Canadian industry – propelling unprecedented expansion into export markets and transforming the nation’s balance of accounts. The Agreement has saved the oil and gas sector, and fueled both business and consumer spending since the early part of the last decade. It has even helped mitigate the effects of economic downturns on both sides of the border. 

None of which means anything, of course, when the trading partner holding the bigger stick flouts its own rules. The American “who’s-your-daddy-now?” approach to international relations may be as infuriating as it is (fast becoming) familiar. It is tempting to fire back with threats of retaliation and dire warnings of a looming trade war.

But this doesn’t serve our long-term economic interests any better than does U.S. unilateralism. As distasteful as it seems, Canada’s best interests are served with equal doses of reason and steely determination. And, yes, that means another round of negotiations.

After all, someone’s got to be the grown-up around here.

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